Books by Gary Graybill

Tuesday, May 11, 2010

Greeks Retire at 50 --and We are Going to Pay for It

President Obama is getting ready to aid Greece with its financial problems. As a result, American taxpayers will ultimately see even higher taxes as our own debt grows. President Obama is trying to ignore the many parallels between U.S. and Greece in the current situation. We both have growing budgetary deficits and expanding entitlement programs. We should be learning from the Greek debt crisis, but the President and Democrats in congress, are determined to put the U.S. on the same path that Greece has followed over the cliff.Greece now faces a dire financial crisis plus their social welfare problems are just as bad. Current Greek government debt is running at approximately 115% of their GDP! Ours was very recently in the single digit percentile but under Obama it has already grown to over 30% and is showing no sign of slowing down. Greece needs about $160 billion in emergency aid in order to prevent a total collapse.

Since investors are no longer willing to provide funding to Greece by purchasing bonds, Greece has been forced to go to the EU and International Monetary Fund (IMF) for an emergency bailout. Germany’s Merkel and President Obama are discussing how much will Germany and the other financially solvent European states will have to come up with and how much will come from the IMF . Merkel naturally wants the IMF, and not Germany, to be stuck for most of the cash required.

We should be alarmed because 17% of all IMF funding comes from us U.S. taxpayers, which means that America will indirectly be one of the largest sources of cash to bailout Greece. The problem with Greece is that it can not fund its expansive government entitlements and has done nothing to improve the competitiveness of Greek industry. It has a huge and expanding government, powerful labor unions, extensive entitlements and regulatory draconian restrictions on small business growth – sound a little like what's happening here lately? These kinds of flawed policies have brought Greece to its knees. Now, we have President Obama trying to implement a similar set of policies for us.

President Obama is trying to cut a deal to help bailout Greece with US money and quickly, while Americans are distracted by financial reform, the oil spill and immigration issues in Arizona. The last thing President Obama wants right now is for average, over-taxed and over-regulated Americans to understand exactly how Greece got into the mess, because he has placed us on the same path. The Obama Administration has, in its first 18 months, already ballooned the deficit with all sorts of pork projects to political supporters and favored constituents. It has supported huge expansions of entitlements and huge growth in government, while disguising and distorting the true costs. They are eroding competitiveness while racking up a deficit we may actually be unable to ever repay.

The Administration is working hard to convince Americans that it is right and proper for the government to take money or property away from some Americans and redistribute it to others. President Obama seems to have the notion that there is no limit to what the government can spend. He suggests we can have it all without any consequences. These are the same bloated and irresponsible financial and social policies that have led Greece to it’s current crisis.When hard working Americans figure out that taxpayer funds are supporting Greek retirees, who retire between 50 and 60, there will be a major outcry. Ironically, President Obama is considering supporting this folly from Greek Unions, just at a time when the U.S. Social Security Administration deficits force the U.S. to consider raising the U.S. retirement age. Resentment will only grow when Americans discover that some Greek workers retire as early as 50 because they were employed in a dangerous occupation like hairdressing which the Greek government has designated as “hazardous” (because of the proximity of toxic chemicals in beauty salons).

Hopefully Americans will question the wisdom of President Obama lecturing Greece on budgetary issues when the U.S. federal government is running almost a $13 trillion dollar deficit and when total U.S. indebtedness including the federal, state, local and personal debt of American citizens is over $55 trillion dollars.

President Obama is trying his best to take this country down the same rough and rocky road as Greece.